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What Is a Customer
Success Manager?
It’s the second-most promising sales job for 2019, according to
a LinkedIn survey. by Andris A. Zoltners, Prabhakant Sinha,
and Sally E. Lorimer

This article is licensed to you, Anna Strzelec of Cisco Systems, for your personal use through 2023-05-31. Further posting, copying or distribution is not permitted. Copyright 2019-11-18
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 HBR / Digital Article / What Is a Customer Success Manager?

What Is a Customer Success

Manager?
It’s the second-most promising sales job for 2019, according to
a LinkedIn survey. by Andris A. Zoltners, Prabhakant Sinha,
and Sally E. Lorimer
Published on HBR.org / November 18, 2019 / Reprint H059PP

Jorg Greuel/Getty Images

When a business buyer makes an initial purchase from a seller, it’s only
the start of the value exchange between the two. Most of the mutual
value accrues over time as the customer benefits and both continues
and expands purchasing.

Consequently, more companies are shifting responsibility for ongoing

customer care and growth from an account manager to a customer
success manager (CSM). The CSM title was almost unheard of a decade

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ago. But, in a 2019 survey of high-tech companies conducted by our

consulting firm, ZS, more than 40% of 109 respondents reported having
CSMs. And a LinkedIn survey identified customer success manager as
the second most promising sales job for 2019, behind enterprise account
executive.

As their ranks swell, CSMs face a multi-faceted balancing act. They

straddle the gap between service and sales, between company interest
and customer interest, and between product expertise and customer
insight. When done right, CSMs are a powerful growth engine. Too
often, however, customers perceive CSMs to be more interested in
making sales than in driving their success. Inconsistency with the role’s
title creates customer dissonance and distrust, threatening renewal and
an expansion of the relationship.

Why CSM Ranks Are Growing

In high-tech sectors, increasing proportions of sales are subscription-
based (such as SaaS products) or consumption-based (such as cloud
services).  Over the past three years, our consulting company’s per
employee spend on recurring-revenue technology products has tripled.
We expect that growth to continue, and for CSMs from our suppliers to
help us get more value from the investment. Hardware sales, ranging
from data storage to jet engines to elevators, are also moving to pricing
models based on usage and uptime. The trend does not stop there.
Business customers are turning to subscription-based delivery of goods
with services such as W.W. Grainger’s KeepStock program, which allows
large businesses to outsource maintenance, repair, and operations
supply inventory management.

Recurring-revenue businesses are not new. In consumer products,

chemicals, and pharmaceuticals, for example, revenues are realized
steadily over time, rather than as one-off sales. Sellers recognize that
in such businesses, usage by customers is the best predictor of renewal

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and growth. And usage depends on ease of adoption and value for the
customer.

With complex and evolving technology products, customers need

ongoing help to adapt and realize value. Customer value realization is
the flywheel that keeps customers coming back. The CSM can be the
power that accelerates the flywheel.

Is CSM an Old Package with New Wrapping?

The title “customer success manager” is used for a variety of sales
roles, some old and some new. Some CSMs are rebranded customer
service managers who deal with hygiene issues such as troubleshooting
and logistics. Other CSMs are erstwhile account managers focusing on
renewal and expansion (“farmers”).  An IT buyer at our consulting
company who deals with numerous suppliers astutely positioned the
CSM role. “Although Alice has the CSM title, she tries to knock down
my door every time she smells an expansion opportunity.  She is just a
pushy salesperson. But Susan is different. She brings ideas about how
we can use her products better. She advocates for us in her company’s
product enhancement roadmap. She keeps us informed about what’s
coming. Every month, she spends a full day onsite with us. Every
quarter, we review our spending and look at other issues that are
important to us. These include cost reduction, speed of handling critical
problems, security, and the path forward.”

The scope of a CSM’s responsibility depends on the opportunity

for mutual value creation, determined by solution complexity and
customer size. For simpler solutions and smaller customers, one CSM
may handle 50 accounts remotely. At the other end of the spectrum, for
key accounts with complex needs, there may be a dedicated mostly on-
site CSM. This individual acts as the coach of the customer relationship,
bringing in technical experts, trainers, and others as needed.

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CSM Balancing Acts

As we said above, CSMs must navigate competing interests in three
categories.

Mission: Customer success or company success?  The CSM job

title reflects a change in the mindset of sellers. Instead of “win the
customer,” the focus has shifted to “show the customer the path to
value.” This is not always easy, especially at companies with hard-
driving, results-oriented sales cultures. Unless leaders purposefully act
to change attitudes and behavior, CSMs will be viewed by customers as
accomplices in making the company’s quarterly sales goals, not as true
trusted advisers. The right mission and culture must be reinforced in
the CSM hiring profile, success metrics, and incentive plan.

Profile: Salesperson or consultant? The CSM success profile is more

like a consulting profile than a sales one. As advisers, CSMs must
leverage their knowledge of company offerings and the customer’s
business and their skills in structured and creative problem-solving.
CSMs are often hired with specific experience in the customer’s industry
or context.

Metrics and incentives: Customer satisfaction or company

revenues? Bonus or salary? Excessive emphasis on short-term,
revenue-focused performance metrics and incentives can shift CSM
attention to company sales goal achievement at the expense
of customer success, which diminishes the business relationship
and reduces CSM impact. At the same time, without some
revenue accountability, CSMs may spend too much time addressing
urgent support needs for friendly customers while ignoring growth
opportunities.  CSM performance metrics can include customer usage
(e.g. retention, renewals, consumption) and satisfaction (e.g. net
promoter score and other customer feedback). Result metrics over
longer timeframes (e.g. annually instead of quarterly) and lower

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incentive pay are also better suited to the CSM role. The ZS survey
indicates 80% of companies put their CSMs on a sales incentive plan
with an average salary/incentive pay mix of 75/25. The same companies
use an average pay mix of 55/45 for traditional sales roles (e.g. business
development/hunters).

Building Customer Trust

To get full value from suppliers and their CSMs, buyers need to do
their part. Buyers may be reluctant to share challenges and future
strategies with a CSM, in part because they worry a sales pitch will
follow. However, this transparency is critical for a CSM to have impact.
As CSMs earns trust, customers invite them to participate in more
internal conversations. This gives them insights for recommending
a path to value, regardless of whether that path includes additional
revenue.

Realizing the power of the CSM is a fine balancing act. Some companies
are getting it right, but many are not. By aligning corporate culture
and CSM success profiles, incentives, and metrics with the objective of
customer success, companies ensure that buyers trust in their CSMs.
This allows CSMs to unlock more value for their customers , creating a
virtuous circle that ensures mutual success.

This article was originally published online on November 18, 2019.

Andris A. Zoltners is a professor emeritus at Northwestern

AZ University’s Kellogg School of Management. He is a cofounder of ZS
Associates, a global business consulting firm, and a coauthor of
a series of sales management books, including The Power of Sales
Analytics.

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Prabhakant Sinha is a cofounder of ZS, a global professional-

services firm. He also teaches sales executives at the Indian School
of Business.

Sally E. Lorimer is a principal at ZS, a global professional-services

firm.

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This article is licensed to you, Anna Strzelec of Cisco Systems, for your personal use through 2023-05-31. Further posting, copying or distribution is not permitted. Copyright 2019-11-18
Harvard Business Publishing. All rights reserved.